STOCKHOLM, Feb 1 Reuters Volvo Cars said on Thursday it would stop funding Polestar Automotive Holding and was handing responsibility for the struggling luxury car brand over to Volvo39;s top shareholder China39;s Geely Holding.

The announcement sent the Swedish automaker39;s stock up more than 30 at market open.

The heavy involvement by Swedishlisted Volvo Cars in Polestar, where it owns around 48 of the shares, has been criticised by analysts who see the stake as a drag on Volvo39;s resources.

Like other new EV brands and startups, Polestar has struggled to make headway, particularly since Tesla started a price war last year.

The automaker said earlier this month that it had missed its alreadyreduced delivery targets for 2023.

Polestar39;s shares are down just over 83 since it went public in June 2022 via a merger with a special purpose acquisition company, or SPAC.

Volvo Cars said it has considered handing Polestar shares over to Volvo39;s shareholders, which would make Geely a big direct owner in the brand.

Shares in Volvo were up 20 at 0814 GMT, after they soared 32 at market open.

Geely in a separate statement welcomed Volvo39;s decision to focus its resources on its own development.

Geely Holding will continue to provide full operational and financial support to the independent exclusive Polestar brand going forward, the Chinese group said.

This support will not require a reduction of Geely Holding shareholding in Volvo Cars, it added.

However, the…